"Back then, the futures would eventually break reflecting the excess supply of cash grain on the market. With the false (non-cash) demand created by these funds, futures may just keep going up and cash will have to reflect the true near-term fundamentals in the US (wheat is that way today)."

  Your above statement is one of the biggest factors why their is also no convergence between cash and futures and the "hot" money from those same funds make it increasingly hard for producers to use the futures market as a risk reduction tool if their is no convergence and basis widens out to historic levels( as in the case of my KC wheat, we are at -1.25 basis whereas -.35 to -.45 is historical.)